Swiss Re’s Smith: NFIP is ‘unsustainable’
The R Street Institute for free markets welcomed Chairman Hensarling’s commitment. R Street senior fellow RJ Lehmann noted that while there will be challenges in moving to a fully private market for flood insurance, including development of appropriate underwriting and catastrophe modeling tools, flood risks already are privately insured in many other developed markets, including Australia and the UK.
“For decades, the NFIP has been offering below-market rates that have subsidized construction in risky and environmentally sensitive regions across the country. Unwinding those distorted market signals in a way that causes minimal pain to existing home and business owners will be a challenging process, but one that is well worth exploring for the sake of both taxpayers and the environment,” Lehmann said.
